City terminates grant administration contract

Monday

Oct 8, 2012 at 9:32 PM

The Lexington City Council voted to terminate its contact with Hobbs, Upchurch and Associates (HUA), a contracted company used to administer various grants for the city, at the Monday night city council meeting.

BY REBEKAH CANSLER MCGEEThe Dispatch

The Lexington City Council voted to terminate its contact with Hobbs, Upchurch and Associates (HUA), a contracted company used to administer various grants for the city, at the Monday night city council meeting. For the past several years, the City of Lexington has been successful in obtaining various grants. The city hired HUA to provide administrative services for many of these grants, working directly with Michael Walser and Amanda Whitaker at a Davidson County satellite office. Over the past seven years, Walser and Whitaker have helped bring over $6 million in Community Development Block Grants and other grant assistance to Lexington, according to council documentation.Recently, Whitaker and Walser left HUA and formed their own grant administrative services business, Carolina Governmental Services. Business and Community Development Director Tammy Absher said because of the departure of Walser and Whitaker the best course of action would be for the city to terminate its contract with HUA. "Because we have only ever worked with Ms. Whitaker or Mr. Walser, I am unsure how Hobbs, Upchurch and Associates are going to perform completing the administration in the grants that are in process," Absher said, noting that she could not speak to the experience HUA has hired in place of Walser and Whitaker.The City of Lexington currently has five grants in progress with Whitaker as lead grant administrator on two of them. The five grants are: Neighborhood Stabilization Program, a $2.1 million grant to assist in providing demolition, redevelopment, acquisition and rehabilitation of approximately 18 homes; the North Carolina Community Development Block Grant Lexington Neighborhood Community Plan Economic Recovery, a $645,000 grant to assist in providing park improvements to the Erlanger Mill Village and for the creation of a park in the Green Needles Area; Lowe's Natural Gas Line Economic Development, a $300,000 grant to assist in providing natural gas to the proposed Lowe's Home Center Thomasville Millwork Facility; Cow Palace Phase I Sewer Infrastructure Improvements, a $305,000 grant to assist in the installation of sewer lines with 32 house connections to serve sections of Cow Palace Road, Vanmar Drive and Bedford Drive; and Moran Foods Water Economic Development, a $500,000 to assist in the installation of water lines and for the construction of 300,000 gallon water tower to the proposed Save-A-Lot Distribution Facility. "When Amanda (Whitaker) and Michael (Walser) left the company, we decided to start with a clean slate. We dealt with the satellite office and Amanda and Michael were the face of Hobbs, Upchurch and Associates. As far as we were concerned, they were Hobbs, Upchurch and Associates," said City Manager John Gray.After the unanimous vote by the council, the contract with HUA will be terminated and the city will begin the process of finding a new grant administration firm. The city staff must receive two proposals and HUA will be offered the opportunity to submit a proposal along with others. The proposals will be evaluated based upon CDBG administrative management experience, experience completing projects approved by the state on schedule; experience, training and certifications of the firm's proposed project manager and staff on CDBG projects; understand the needs of the city and responsiveness of the firm to request for proposal requirements.HUA recently underwent an review by the North Carolina Department of Commerce –— Community Investment. Yadkin County made allegations that HUA had submitted inaccurate and false information to Yadkin County in which Yakin County and HUA submitted to the Community Investment office in connection with a CDBG application. As a result of Yadkin County's review, the Community Investment office contacted other jurisdictions that used HUA; this led to further review of a CDBG project in the Town of Haw River. Based upon the review, the Department of Commerce determined there were deficiencies in the documentation which caused noncompliance with CDBG program requirements. Depending on the requirements of the grants each jurisdiction was applying for, they had a limited number of days to correct the documentation. When Gray was asked if the happenings in Yadkin County and the Town of Haw River were a part of the decision to terminate the HUA contract, he answered, "no." "It had only to do with the fact that Whitaker and Walser resigned," Gray said. "Since this time we have had other firms contact us wanting to submit proposals. Rather than favor one over the other, we decided to wipe the slate clean and start over.""The key to administering these grants successfully is being intimately familiar with the details and the nuisances. If we stayed with Hobbs, Upchurch and Associates, we would need to bring a new team up to speed and we don't know their qualifications or how familiar they are with our programs," Absher said.The council discussed the liability of terminating the contracts, examining the possibilities with Absher, Gray and city attorney Phyllis Penry. THere may be financial consequences to terminating the contract, Penry said."If we're opening the process, we may be dealing with (getting a new team up to speed) anyway," Callicutt said.Absher said that was true but if they were going to do that, they would rather start clean and have the chance to get the most qualified individuals. The motion to terminate the contract moved forward with a 7-1 vote. Councilman Linwood Bunce voted against the motion Rebekah Cansler McGee can be reached at 249-3981, ext. 228, or at rebekah.mcgee@the-dispatch.com.

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